"Death bed" estate planning

I occasionally get a call from a family member saying an older uncle (or aunt or grandparent, etc.) is in the hospital in a terminal condition. For instance, the grandfather has terminal cancer and is not expected to live much longer. The grandfather is heavily medicated, and goes in and out of consciousness. The person calling then asks if I can quickly prepare a new Will or Trust Amendment for the grandfather to sign before he passes.

I have found that this is just a lawsuit waiting to happen. Any estate planning that occurs at this juncture is bound to result in someone in the family being unhappy ... and having good grounds to not only unwind the death bed documents because of lack of capacity, but to bring a claim for undue influence or a violation of the vulnerable adult statute.

The wiser thing to do in such a situation is to let the person die in peace and dignity.

Gun collection in an estate

Personal Representatives will sometimes discover that the person who died owned a gun collection. When that happens, I suggest that the Executor employ the services of a reputable gun dealer for several reasons. First, they can appraise the value (which you need for your records and for the Inventory). Second, if the gun is being shipped to a beneficiary of an estate, it has to go through a dealer. Third, the background check and other requirements for dealers gives you an extra layer of protection. Fourth, the dealer will know how to maximize the sales price.

If the gun is a collectible like a historic German pistol from WW II, then consider using an auction company that can obtain a better price than the typical gun shop. The probate judges are interpreting the “best interest” standard in A.R.S. 14-3703 to require the PR to maximize the income to the estate. That being said, even if you could get a few hundred dollars more from a private sale, I believe your duty to protect the estate (and yourself) from a future lawsuit trumps that. Use a dealer.

Arizona Courts Can Resolve Trust Controversies

Under the Arizona Trust Code, the probate court has much disretion in resolvin gdisputes arising out of trusts. For example, in ATC Section 14-10412, the probate court is given the power to modify the administrative or dispositive terms of a trust or terminate the trust. In ATC Section 14-10415, the probate court is given clear statutory authority to reform the terms of a trust if it can be proven by clear and convincing evidence that both the settlor's intent and the terms fo the trust were affected by a mistake of fact or law. In ATC 14-10416, the Probate Court may modify the terms of a trust to achieve a settlor's tax objectives, and can make that modification retroactive in effect. In ATC 14-10702, the probate court may dispense with the need for a trustee to post bond or may require one even if the trust instrument does not require it. In ATC 14-10706, the probate court has broad authority for removal of a trustee. In ATC 14-10708, the probate court may adjust up or down the compensation afforded a trustee according to the terms of the trust if the court determines that the duties of the trustee are substantially different than what was contemplated when the trust was drafted, or the compensation specified by the trust would be unreasonably high or low.

If you have any questions about an Arizona trust, you can reach me at 602-443-4888 or email me at paul@delougherylaw.com.